An important issue for both decision-makers and international relations researchers who focus on South-South Cooperation concerns the evolving relations between the four regional giants of the BASIC-group – Brazil, India, China and South Africa. Given the ups and downs in relations between Brazil and China on ”currency wars” due to the undervalued Chinese currency and longstanding issues in the relationship between China and India on unresolved border issues and the Tibetan government in exile – one wonders if these countries can form a solid alliance outside ongoing multilateral talks on trade and climate change.
Of particular interest are the unfolding relations between democratic and welfare-oriented Brazil and authoritarian and growth-oriented China under Brazil’s leader Dilma Rousseff and China’s incoming new President Xi Jinping, who is likely to take over the state rudder after incumbent President Hu Jintao. Within the international system, China and Brazil are dominating their respective home regions, Brazil arguably more so in South America than China in East Asia. In the near future, the decibels and sounds of their voices will continue to increase in both old and new forums such as the IMF, the World Bank, the WTO and the G20-group. As of yet, both countries are guided by the common ideas independence, pragmatism and longing for international respect in their foreign policy strategies.
Brazilian brazenness and cautious China
During the failed negotiations on climate change in Copenhagen 2010, the BASIC-group put up resistance against the USA and the EU countries. Their powerful argument was that developed countries had accumulated debt for more than hundred years of CO2 emissions, and that they had a legitimate right to raise their countries’ living standards through industrialization. In the seemingly endless trade negotiations of the WTO Doha round, the BASICs have often coalesced around similar positions against the developed countries. Yet, in the aftermath of the still ongoing global financial crisis that kicked in with the credit crunch, first in the United States in 2007 and then hitting the Eurozone severely, fault lines have become visible also in the BASIC-structure and between the BRICS. In September 2011 the Brazilian Finance Minister Guido Mantega proposed that the BASIC-countries, together with Russia, would financially assist the richer developed countries to save them from sinking even deeper into debt problems, to stop financial contagion to spread to developing nations. Although this proposal was picked up by Chinese state-owned mass media as sensational and signaling the changing world order, Mantega’s Chinese colleague did not support the initiative.
Notwithstanding the obvious clichés inherent in describing Brazilians as burlesque and emotional, and Chinese as reserved and technocratic, this pairing of adjectives make more sense than the other way around. Arguably, the broader relationship as well as existing and incipient differences between these two emerging economies and geopolitical players has not yet been fully investigated in research on international politics. Under its former President Lula, Brazil moved from being a constantly under-achieving promise to become the bright star on the global scene. Not just an economic power house, it went from economic mess and political instability to being a social example and a model for other developing countries.
Democratic Brazil of the South, Authoritarian China of the North
How can a democratic and appreciated Brazil liked by many and an authoritarian China with few friends work together on a set of difficult issues in the domain of global public policy in the future? Perhaps there is no real contradiction as long as they both perceive the developed Western countries as imperialistic in character and hegemonic in action? If that is not the case, the long cherished and in recent years reinvigorated notion of South-South Cooperation (now with add-on notion of mutual win-win) may loose its current force. The major economic risk in the bilateral relationship between the two nations is that Brazil starts to perceive the West a lesser hegemonic and economic threat than – China. It’s not so much the absolute numbers that is the problem, Brazil had a trade surplus of 5.2 Billion with China in 2010, as what is being traded. As the trade balance between them develops, it certainly looks more like a classic trade exchange between the resource rich and dependent colony and the mother country, which refines the ore and exports it back as a value-added and branded product. Some have argued that Brazil is de-industrializing as a consequence, but not only that, Brazilian agribusiness is also feeling hammered by Chinese land acquisitions around the country. Therefore, Along with this economic risk, comes the political risk of a China that looks set to become the world’s number one economy. As numero uno, China may no longer cling to the agenda of South-South Cooperation in practice, although it is unlikely to through it overboard in even the medium term. China could become more interested in keeping (and slightly modify) the existing world order institutions than replacing them with something entirely new. Already, there have been murmurings and a great deal of surprise in Brazil that China does not want to reform the United Nations Security Council. A reform would almost certainly result in a permanent seat for Brazil – but also for India and perhaps Japan. And China is reluctant to see these two neighboring big countries be given seats at the table of the permanent members of the UN Security Council.
Future issues of contention
Other issues may heat up as well. In the Spring of 2011, the Brazilian Finance Minister Mantega warned of coming currency wars due to the undervalued Chinese Yuan, which continues to give China a comparative advantage as an exporter of already cheaply produced consumer goods. Human rights is another such policy area where contention is likely to emerge, even the issue of climate change may be an area where the two may ultimately choose different courses (2). There are just too many differences between political systems, more trade competition on the respective home markets and the world market. Add to this the geopolitical rivalry between China and India. Thus, when looking back on today’s debates from a future vantage point perhaps the bloc of BASIC/BRICS never went any further than building the basic structure of occasional joint meetings, it never materialized or institutionalized into a true force of the developing global South. An interesting runner-up platform is instead the IBSA forum, a trilateral meeting between the democracies India, Brazil and South Africa (1).
(2) Carlos Pereira and João Augusto De Castro Neves, “Brazil and China: South-South Partnership or North-South Competition,” Brookings Policy Paper, No.26, March 2011.